EXHIBIT 6.—Average number of employees of bituminous coal operations

Authority: Bureau of Mines of U. S. Department of Interior annual reports, except: 1 For Johnson County, specifically furnished by the Bureau of Mines.

2 For Martin County, estimated by applying 1942 average production of 5.97 tons per man per day to actual tonnages as shown on exhibit 1.

Office of General Coal Freight Agent, N. & W. Ry., Nov. 1, 1945.

EXHIBIT 8.-Average number of days worked by the bituminous coal mines for the respective years shown

Authority: Bureau of Mines of U. S. Department of Interior annual reports, except: #Estimated by applying 1942 average production of 5.97 tons per man per day to actual tonnage shipped over Norfolk & Western Ry.

Office of G. C. F. A., N & W Railway Co., Roanoke, Va., Nov. 1, 1945. W-m.

EXHIBIT 9.-Statement showing potential production capacities of bituminous coal mines and ratio of actual production to potential production capacities (the potential production capacities were arrived at on actual daily production based on figure shown in exhibits 1 and 8 multiplied by 261 days)

Mr. LAWSON. Thank you very much, Mr. Lehmann. Mr. Chairman, at this time I desire to file for the record a statement by Clifton A. Woodrum, Jr., of Roanoke, Va.

Mr. PETERSON of Georgia. Without objection it will be received. (The statement referred to follows:)

STATEMENT OF CLIFTON A. WOODRUM, JR., ATTORNEY AT LAW, ROANOKE, Va.

Mr. Chairman, my name is Clifton A. Woodrum, Jr. I am an attorney engaged in the private practice of law in Roanoke, Va. I am appearing before your committee in opposition to the proposed canalization of the Big Sandy River and its tributaries in behalf of the Norfolk & Western and Chesapeake & Ohio Railways. I have a prepared statement which I request permission to file with the committee, a résumé of which I would like to present at this time.

Mr. J. Brooks Lawson has already presented to the committee an outline of a number of objections to the authorization of the Big Sandy project. I wish, at this time, to touch briefly on certain other features which demonstrate still further the fundamental unsoundness of this proposal.

The policy of the Federal Government toward the development and improvement of the transportation of the Nation has been clearly and unequivocally announced in the Interstate Commerce Act and in the various laws relating to river and harbor improvement.

In the Tranpsortation Act of 1940 (49 U. S. C. 1,301,901 notes) Congress declared that the national transportation policy was to provide for fair and impartial regulation of all modes of transportation, recognizing and preserving the inherent advantages of each to the end of developing a national transportation system by water, highway, and rail adequate to meet the needs of the commerce of the United States.

In dealing with the improvement of inland waterways, the Board of Engineers for Rivers and Harbors is directed to advise the Congress of the State or local benefits which will accrue as a result of the recommended projects and what, if any, local cooperation should be required (33 U. S. C. 547).

If public terminals do not exist or are inadequate, the Board is directed to give Congress its opinion as to the necessity, number, and location of public terminals and their relation to commerce (33 U. S. C. 545). This has not been done.

The importance placed upon the construction of public terminals is contained in the declaration of policy set forth in section 551 of title 33, U. S. C.;

"It is hereby declared to be the policy of the Congress that water terminals are essential at all cities and towns located upon harbors or navigable waterways and that at least one public terminal should exist-constructed, owned, and regulated by the municipality or other public agency of the State and open to the use of all on equal terms. The Secretary of War, through the Chief of Engineers, shall give full publicity, as far as may be practicable, to this provision."

The expressed congressional policy contemplates that (1) each mode of transportation shall supplement, not destroy, existing modes to the end of a nationally integrated system designed to serve the commerce of the United States as a whole; (2) where special benefits are conferred, a portion of the cost shall be assumed by the localities affected; and (3) the existing or proposed terminal and transfer facilities shall be such as to permit use of the project in such manner that the benefits derived therefrom will inure to the public at large and not to be confined to any one special group.

On the basis of the facts presented to this committee, it has not been demonstrated that the project for which approval has been asked will satisfy a single one of the criteria established by the Congress as a guide in the development of the transportation of the Nation.

I. THERE IS NO COMMERCIAL NECESSITY FOR ITS CONSTRUCTION AND ITS ONLY EFFECT WILL BE TO ACTIVELY COMPETE WITH ADEQUATE EXISTING MODES OF TRANSPORTATION

The proposed Big Sandy Canal is a dead-end canal whose only justification is the transportation of coal to existing waterways from a small and restricted area. The proponents of the project contend that by reason of its juncture with the Ohio River the canal will become an integral part of the great system of inland waterways. This claim ignores the fact that coal produced in the tributary area has already available all of the facilities offered by the existing system of water

ways over a short rail haul to the Ohio River and with special railway rates existing or assured.

(a) The existing transportation is adequate.

In support of the commercial necessity for the canal, the proponents contend that existing modes of transportation do not enable coal to be produced in the tributary area and marketed in competition with coal produced elsewhere, and that the project is essential to continued production in this area.

The report of the consulting engineer, an exhibit to the district engineer's report, disposes of the question of the adequacy of existing modes of transportation when it states at page 17

"The (Elkhorn) district, through the C. & O. Railway, has enjoyed splendid access to all of the major market areas via the same system of freight rates governing other production district No. 8 mines. The rail service furnished by the C. & O. has always been above criticism."

And at page 28:

"Like the Elkhorn district, this (Williamson) district has been splendidly served by the N. & W. Railway in the competitive markets both east and west. Freight rates now in force correspond to those in effect throughout production district No. 8."

(b) The production and marketing of coal from the Big Sandy area is not handicapped by absence of waterway facilities.

Exhibit 1 to the statement of N. R. Lehman filed before the Board compared the coal production from the Big Sandy area with that of the United States as a whole and with that from the actively competitive States of Illinois, Indiana, Kentucky, Maryland, Ohio, Pennsylvania, Virginia, and West Virginia for the period 1923 to 1943. The first year, 1923, was taken as a base period and the coal production in all areas for this year designated 100 percent. The comparison shows that for the 20-year period production for the entire United States and for the actively competitive States exceeded that of the base period in only 3 years. During this same time, however, production from the Big Sandy area exceeded that of the base period in 13 years. During this period production in the United States as a whole averaged 80.8 percent of the base period, production in the actively competitive States averaged 81.5 percent for the base period, while production for the Big Sandy area averaged 113.9 percent of the base period.

In view of this tremendous increase in production in the Big Sandy area, it is obvious that this area is under no handicap preventing the production and marketing of its coal.

(c) There is no commercial necessity for the project.

The lack of any commercial necessity for the project is demonstrated in the statement filed with the Board by Mr. J. M. Vest, an official of the Island Creek Coal Co. This company, which owns terminal and transfer facilities, as well as towboats and barges, as a result of a survey made 6 months before the hearing before the Board was unable to find any river markets to justify an annual increase of 300,000 tons of coal. Where, then, will be the markets for the additional 8,300,000 tons contemplated?

II. ALTHOUGH THE BENEFITS ANTICIPATED ARE ALMOST ENTIRELY LOCAL, THE ENTIRE COST OF THE PROJECT IS TO BE ASSUMED BY THE FEDERAL GOVERNMENT

As previously noted, the sole commodity to be transported on this dead-end canal will consist of coal and the proponents, themselves, restrict the tributary area to an area within 10 miles on either side of the canal. As a matter of fact, an examination of the district engineer's report reveals that the coal which is claimed can be transported over the canal a transportation cost saving will be produced in mines not more than 10 miles from the canal.

That the "benefits" which may result from the canal will result almost exclusively to the localities lying within this 10-mile belt on either side of the proposed waterway is hardly open to question. It is equally apparent that such a federally subsidized mode of transportation will have a correspondingly detrimental effect on those competitive localities unable to avail themselves of its facilities. What provision has been made, then, for a participation in the costs of construction by the localities expecting the benefits.

The only indication of any contemplated "local" participation is the condition contained in the report of the Board and approved by the Chief of Engineers that local interests "maintain all parts of railroads, highways, bridges, and utilities which would be altered or constructed as a part of the improvement." It thus appears that no local participation in the cost of construction or operation of the

actual project is contemplated or will be required. This is not only contrary to the intent of Congress, but is not consistent with the policy adopted for other projects.

In Transportation and National Policy, May 1942, the National Resources Planning Board, at page 432, pointed out

"Most existing projects require that local interests furnish, free of cost to the United States, necessary easements, rights-of-way, and spoil disposal areas during initial construction and for future maintenance as and when required and to hold the Government free from claims for damages attributable to the improvements and their maintenance. On practically all navigation projects, local interests are also required to construct terminals open to the public on equal and reasonable terms and to provide suitable public highway approaches thereto; to construct new bridges and to make necessary alterations to existing bridges as may be required; to dredge branch channels and turning basins; and to provide other appropriate measures of cooperation."

III. BENEFITS DERIVED FROM THE PROPOSED CANAL WILL INURE ALMOST ENTIRELY TO A FEW SPECIAL GROUPS AND WILL NOT BE AVAILABLE TO THE PUBLIC AT LARGE

The only "savings" or "benefits" attributed to the project is the difference in transportation costs which it has been estimated will result from the construction of the canal. In order to take advantage of these "savings" or "benefits"which, at best, are problematical-it will be necessary for someone to construct, operate, and maintain adequate terminal and transfer facilities and to purchase and operate the towboats and barges required to handle the volume of traffic expected. This matter is disposed of by the Board with the summary, and possibly hopeful, statement that outside interests will build and operate the terminals. The district engineer estimated that in order to move the 15,000,000 tons annually which formed the basis of his report there would be required a total of 38 towboats and 476 barges, involving an initial capital investment of $16,336,000. Assuming that in view of the reduced tonnage contemplated by the Board only one-half of the number of towboats and barges would be required, a capital investment by some undisclosed private interest of $8,163,000 would be necessary. Lester C. Hammond, consulting engineer, of New York City, made an extensive study of the question of the number and cost of terminals, towboats and barges necessary to handle the expected volume of coal. His conclusions were set forth in a detailed statement filed with the Board. Mr. Hammond found that the average existing mine along the Big Sandy and its tributaries had a production of 150,000 tons of coal annually and, therefore, concluded that the average terminal should be equipped to handle 180,000 tons of coal annually. The minimum initial cost of such a terminal was found to be $71,000. It would, therefore, be necessary to construct 46 such terminals at an aggregate initial cost of $3,266,000.

Thus, even after the construction of the canal and before its facilities can be used, an additional capital investment totaling $11,429,000 must be made. By whom would this investment be made? The existence of any interest or group of interests prepared to make such an investment on the basis of the highly speculative savings is, to say the least, doubtful.

Aside from the improbability of the investment of any such sum by any interests, it is admitted by the Chief of Engineers that in the event of the construction of the terminals, most would be private and would handle the bulk of the traffic and that public terminals would not be required.

This failure to require or provide for public terminal facilities must necessarily result in the estimated benefits accruing only to those interests of sufficient size and with the necessary capital to construct private facilities to the consequent loss to the small producer and the public at large.

IV. TRANSPORTATION OF COAL ON THE PROPOSED CANAL WILL NOT APPROXIMATE THE ESTIMATE OF THE BOARD OF 8,300,000 TONS ANNUALLY

The Board has estimated that 8,300,000 tons of coal will be transported annually on the canal. Even using the inflated "savings" which the Board attributes to the canal, a minimum of 5,237,500 tons must move annually in order to make the project barely break even. It is anticipated by the district engineer and the Board that the major portion of this tonnage will move via the Ohio into the Mississippi and thence to the points of ultimate destination.